Detergent makers accused of running price-fixing cartel

Sarah Whyte and Eli Greenblat

Cold Power laundry powder is one of the brands alleged to have been involved as part of the cartel.

Three of the biggest laundry detergent makers in Australia have been accused of forming a price-fixing cartel with the knowledge of supermarket chain Woolworths.

Colgate-Palmolive and Cussons have been accused of collectively making a decision in 2009 to stop supplying cheaper laundry detergents, only offering more expensive ''ultra'' concentrates, the Australian Competition and Consumer Commission alleged in the Federal Court on Thursday afternoon.

Unilever, which blew the whistle on the alleged cartel, has been given immunity from the charges.

The prices of popular household detergents, including Cold Power, Radiant and Omo, were all changed at the same time, significantly affecting consumer prices.

The commission alleges Colgate, Unilever and Cussons simultaneously moved to supply ultra-concentrates to the major supermarkets and cease the supply of standard concentrated laundry detergents.

But in New Zealand, the ultra-concentrates' introduction was staggered, meaning consumers were offered promotional offers during the time of transition, it has been alleged. ''By way of contrast, when similar products were launched in New Zealand, there was significant discounting, such as offering a larger pack for the price of a smaller pack,'' commission chairman Rod Sims said.

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The commission found the ultra-concentrate detergents were cheaper to produce, store and transport. It alleges that this offered significant cost savings which, by agreement, were not passed onto consumers.

''These alleged arrangements also standardised the ultra-concentrate products offered, denying consumers a variety of choices on pricing, package volumes and the strength of the concentrate product,'' Mr Sims said.

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Court documents show that in 2008, Colgate proposed a voluntary agreement that the industry would transition to ultra-concentrates by early 2009. This was named the ''Colgate Proposal'' and was then circulated to representatives of the major detergent companies, but without attribution to Colgate, the documents show.

Woolworths is alleged to have played a key role in organising the simultaneous transition to ultra-concentrates and the introduction of an anti-competitive pricing strategy. The commission alleges Woolworths was knowingly concerned in these arrangements.

But the supermarket says it will ''vigorously defend'' the action brought against it by the ACCC. It said in a statement on Thursday afternoon it should be made clear the commission has not alleged that Woolworths was party to any cartel. It also said its early analysis showed Woolworths' retail price of about half the relevant products decreased in the year following the transition to ultra-concentrates.

The supermarket believes the commission has sacrificed good process in favour of a deadline to launch the court action on Thursday. It said it took the allegations seriously and would co-operate. But Woolworths has also hit out at the regulator, saying it has ''serious concerns about the way the commission has engaged with us''.

Unilever said it had conducted its own internal investigation, conveying its findings to the commission and the New Zealand Commerce Commission. The court case is expected to run in February.